Having a private fleet is becoming increasingly difficult to manage, and if you haven’t considered whether outsourcing your fleet is right for your organization, we have put together some major considerations to evaluate. This topic has been highly debated, especially in the past few years. We spoke with several experts from our team at Ruan, each specializing in different aspects of the transportation and logistics industry, to share their insights on why outsourcing all or part of your private fleet could be worth considering in the years ahead.
According to An Analysis of the Operational Costs of Trucking: 2024 Update by the American Transportation Research Institute (ATRI), private fleets faced higher total marginal costs per mile compared to for-hire fleets, with driver wages, benefits, and truck and trailer payments being the most significant factors. In this series, we will breakdown each of these significant factors, while focusing on additional elements that should be highly considered when making the decision to keep your fleet in-house or explore what outsourcing may look like.
Driver Recruiting and Compensation
If your organization currently operates its own private fleet, driver wages and benefits, and HR administration, including hiring, might be a significant factor contributing to your high operating costs, but also cause some hesitations when thinking about outsourcing these functions to a dedicated provider. At Ruan, we have a team dedicated to driver hiring and compensation analysis, with extensive transportation industry knowledge to help streamline these operating costs for you. Ruan typically retains 80-85% of a private fleet when transitioning to Ruan, and this team works hard to put together a competitive pay package and become an extension of your business to onboard, train, and retain drivers. Ruan’s Director of Compensation, Tom Eimers, and Director of Talent Acquisition, Sarah Fenimore, break this down for us.
What job characteristics and factors need to be considered when evaluating driver wages and putting together a package?
We look at the markets that the fleet will be operating in and where the fleet will be domiciled. When our team is conducting the analysis, we get down to researching and benchmarking at the city and/or county level so that we can ensure our pay package for drivers is competitive in the market.
Next, we look to get a really good understanding of the job. What is the average number of miles, stops, and loads a driver will be responsible for? We are also provided detailed schedules of the drivers’ work week that our Solution Engineering team optimizes, and we take all these scheduling factors into our pay package formula, including whether it’s an a.m. or p.m. shift, whether they work weekends, whether they have split days off, etc.
Similarly, the Solution Engineering team optimizes driver routes, which we analyze to see if the route requires the driver(s) to layover away from home or if the route is going to get them home daily.
Lastly, we look at driver equipment, including the trailer types and special endorsements required to operate specialized equipment and/or product. This includes day cab or sleeper, dry vans, flatbeds, tanks, etc. This even includes what the driver's responsibilities will be beyond just driving (help unload the trailer, secure cargo, use a pallet jack, etc.).
Each specific characteristic of the job is important when conducting research in the market and we ensure each detail is included in our pay calculation.
Walk us through a typical driver wage analysis process.
Our dedicated compensation team researches driver wages both internally and externally. Ruan operates in 300+ locations across the nation and we have developed wage analyses for similar roles we often analyze and have this knowledge as a benchmark within our own company. One significant advantage Ruan has is our large footprint throughout the United States. We operate fleets in all types of industries, so we're able to use our own successes in markets as a guidepost for where we need to be from a driver pay standpoint. After we finish our analysis, we build out our pay package. This consists of determining whether we'll pay based on activity (miles, stops, loads, etc.) or hourly. The final step is to communicate the pay package to our Solution Engineering team so they can include it in our pricing model.
What are Ruan’s qualifications applicants must meet to be considered for a driving position at Ruan?
Here are our minimum requirements for applicants:
What are some of the challenges of recruiting drivers and how does partnering with Ruan alleviate this headache?
Qualified applicant flow is an ongoing challenge the industry faces. However, Ruan’s visibility online through our website ruan.com and through other digital mediums and marketing campaigns provides our team with consistent applicant flow. Our nationwide footprint also makes our drivers recognizable on the road, and our drivers take pride in that.
Another challenge companies run into is developing a knowledgeable team - each member of our recruiting team has a dedicated, specific account they are assigned to, so they act as an extension of that operation/customer partner. This ensures each location is properly staffed with drivers that have specific certifications and endorsements related to the product being hauled and the customer. We have driver applicants complete all pre-employment requirements prior to onboarding. This allows for seamless transition into onsite training for the driver and the operation. This also helps us focus on the quality of the driver rather than the quantity of applications. Additionally, our team ensures we are meeting FMCSA guidelines and are keeping up with regulatory changes.
What is our process to onboard drivers during a start-up transition?
We currently have a 94% satisfaction rating for our onboarding training program from our drivers. We require a two-day classroom training course, with additional onsite safety training when onboarding new drivers to Ruan.
We make the application process as easy as possible and create a pay package and communication plan to make sure the drivers transitioning from the private fleet to Ruan feel informed and supported. The drivers we hire are dedicated to one customer and take pride in representing the customer.
What makes Ruan’s recruiting process unique?
We have a full-service recruiting team that focuses on quality over quantity – each recruiter truly becomes an extension of the operation. Ruan is not a typical recruiting agency. For example, the dedicated recruiter holds weekly hiring calls with operations leaders to support each customer’s requirements and keeps close tabs on applicants and hiring needs.
One of the most powerful skills we have is retaining drivers. While recruiting is very important, we believe driver retention is equally important. Having competitive pay, consistent work schedules, late model equipment, a good work environment, a safety culture, and putting our People First are the primary focus areas to reduce turnover. This starts with the recruiting team being transparent about the details and expectations of the job, and treating drivers with respect by being engaged throughout the hiring process.
Interested in learning more or have an upcoming RFP? Contact Allison Meiners.